With the number of tax laws scheduled to sunset this year and uncertainty about what the White House and Congress will do next, businesses face quite the tax-planning challenge. However, there are things you can do that may help reduce your 2012 tax bill.|
Buy equipment. For tax year 2012, you may be able to expense up to $139,000 of qualifying business property purchased between Jan. 1, 2012, and Dec. 31, 2012, under Section 179 expensing rules. Qualifying property can include new or used equipment and certain software.*
Take bonus depreciation. You may be able to take advantage of 50 percent bonus depreciation for qualified new equipment purchased and placed into service in 2012. Bonus depreciation may be useful for your business if you’ve purchased more than $560,000 in new capital equipment in 2012, since the Section 179 expensing deduction starts to phase out at that level.*
Set up a retirement plan. Small businesses (fewer than 100 employees) may be able to claim a tax credit for part of the cost of starting up a simplified employee pension plan (SEP), savings incentive match plan for employees of small employers (SIMPLE) or qualified retirement plan for their employees. The credit toward the cost of setting up and administering the plan is available for the first three years of the plan, up to a maximum of $500 per year. In addition, businesses generally can deduct contributions made to certain retirement plans for employees.**
Cover employee health insurance costs. Employers with fewer than 25 full-time employees who earn an average of less than $50,000 a year and who pay for at least one-half of employee health insurance premiums may be eligible for a tax credit of up to 35 percent of premiums paid in 2012.**
Talk to your tax advisor
Be sure to discuss your situation with a tax professional or attorney, especially if there are tax law changes that may affect you before the end of the year. If you’d like to explore leasing and/or financing options for equipment eligible to put into service this year, contact a business banking expert at American River Bank.
* Source: Section179.org.
** Source: Internal Revenue Service, irs.gov.
Please note that neither this financial institution nor any of its affiliates give tax advice. Consult your tax advisor for information specific to your situation.